DBS Bank – Bitcoin Could Be Better Store of Value Than the US Dollar May 23, 2021 May 23, 2021 Kelly Cromley http://1AZFjzw2#Nwf63pYaMWq#xIY
Bitcoin NewsMay 23, 2021 by Kelly Cromley

DBS Bank – Bitcoin Could Be Better Store of Value Than the US Dollar

DBS, Singapore’s biggest bank, may choose Bitcoin as a reserve currency over the US dollar. DBS’s Chief Investment Office recently sent a letter to clients arguing that Bitcoin is a better store-of-value asset than US dollar. According to DBS, while global central banks begin to pump fiat into the economies, Bitcoin could provide an option for investors who may not want to be subject to dollar depreciation.

“Indeed, the exponential rise in Bitcoin prices are rivaled only by the meteoric expansion in the balance sheets of the largest global central banks around the world – the US Federal Reserve, the European Central Bank (ECB), the Bank of Japan (BOJ), as well as the People’s Bank of China (PBOC). Such trends would unequivocally drive demand for alternative currencies, even unorthodox digital forms that would potentially represent a store of value more faithfully than physical dollars would.”

Bitcoin’s decentralized architecture, combined with its small availability, makes it a good store-of-value alternative for investors, according to DBS. Bitcoin is more properly defined as a crypto-commodity than a currency, according to the panel, because of its limited availability.

Notes DBS,

“Even the best quality diamonds would not hold a candle to Bitcoin’s portability value.”

Bitcoin tends to have a weak correlation with other assets, according to the bank, suggesting that it may help investors in hedging their portfolio. DBS agrees, nevertheless, that Bitcoin has scaling problems due to its dependence on the proof-of-work (PoW) consensus protocol, which necessitates a significant quantity of energy to validate transactions.

Furthermore, according to DBS, the amount of resources used by the network for transfers and Bitcoin mining may be a cause of worry. Tesla CEO Elon Musk recently reported that the company will no longer take Bitcoin as payment due to worries about the Bitcoin mining system’s ecological consequences. Bitcoin, according to DBS, is a risky currency that may pose legal threats in the future.

“It is doubtful that all these central officials will simply stand by without upholding monopolistic power over the multiple currencies that Bitcoin threatens to usurp,” the bank adds if Bitcoin gains recognition as a trustworthy commodity independent of state control.

Given its unclear future, DBS maintains that Bitcoin may be at the frontline of a “monetary transition,” which is “a potential (fiat) money cannot buy.”

AuthorKelly Cromley

Kelly is our in house crytpto researcher, delving into the stories which matter from blockchains being used in the real world to new ico coming out.